Thursday August 3 2017

Mortgage Market Commentary

By Al Bowman

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Thursday's bond market has opened in positive territory following uneventful results in this morning's minor economic data. Stocks are mixed during early trading with the Dow up 2 points and the Nasdaq down 17 points. The bond market is currently up 9/32 (2.23%), which should improve this morning's mortgage rates slightly.

Last week's unemployment figures were posted at 8:30 AM ET this morning. They revealed that 240,000 new claims for unemployment benefits were filed last week. That was down from the previous week's revised 245,000 new filings and lower than the 242,000 that was forecasted. The decline in new claims is technically bad news, however, this is only a weekly report and the small variance wasn't enough to affect this morning's bond trading or mortgage pricing.

June's Factory Orders data was released at 10:00 AM ET, showing a 3.0% increase in new orders at U.S. factories. The increase indicates strength in the manufacturing sector, but was very close to the 2.9% rise that analysts were calling for. Therefore, it also has had little impact on this morning's mortgage rates.

Tomorrow brings us the almighty monthly Employment report at 8:30 AM ET. This report gives us the U.S. unemployment rate, number of jobs added or lost during the month and average hourly earnings for July. The best scenario for the bond market is rising unemployment, a sizable loss of jobs and little change in earnings. While some believe the preliminary reading to the GDP is the single most important report in general, it is posted quarterly rather than monthly like the Employment report. Tomorrow's report is expected to show that the unemployment rate inched lower last month 0.1% to 4.3% while approximately 181,000 jobs were added to the economy. Due to the importance of these readings, we will most likely see quite a bit of volatility in the markets and mortgage pricing tomorrow if it shows any surprises.

If I were considering financing/refinancing a home, I would....Lock if my closing were taking place within 7 days...Lock if my closing were taking place between 8 and 20 days...Lock if my closing were taking place between 21 and 60 days...Lock if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

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About the author

Al Bowman began his residential lending career in 1986 and has shared his expertise with mortgage shoppers on the internet since 1994. With an expertise in residential loan origination and underwriting, Al's work also appears on a weekly basis in local and regional newspapers. He is well known for his ability to translate complex economic data into laymenís terms so that the average mortgage shopper can understand how and why mortgage rates change from day to day.